Kiwoom Securities posted a net profit for the current period of 238.6 billion won in the third quarter of this year, a 26% decrease from the same period last year. This was due to a decline in stock commission revenue compared to the previous quarter caused by reduced stock trading value, as well as an increase in operating expenses (selling and administrative expenses), including education tax and personnel costs.
According to Kiwoom Securities' Investor Relations (IR) materials and fair disclosure of earnings released on the 30th, the company recorded a consolidated net profit for the current period of 238.571 billion won in the third quarter of this year. This represents a 26% decrease from the same period last year and an approximately 65% decrease from the previous quarter.
Third-quarter revenue decreased by approximately 57% compared to the previous quarter, while operating profit fell by 49%.
This was due to a decline in brokerage commission revenue, including stock commission revenue and derivative commission revenue, compared to the second quarter. Domestic stock commission revenue decreased from 316.5 billion won in the second quarter to 168.9 billion won in the third quarter, while overseas stock commission revenue fell from 135.5 billion won to 75.8 billion won. Derivative commission revenue also declined from 50.3 billion won to 42.2 billion won.
In fact, the daily average trading value of domestic stocks decreased noticeably. Kiwoom Securities' contracted stock trading value was 36.3 trillion won in the second quarter but shrank to 21.5 trillion won in the third quarter. However, Kiwoom Securities' retail (individual customer) market share remained at 25%, maintaining the level of the second quarter.
Compared to the same period last year, stock commission revenue, operating profit and loss, and Investment Bank (IB) commission revenue all increased. Third-quarter stock commission revenue rose by 32.1% to 244.7 billion won, while derivative commission revenue increased by 23.8% to 42.2 billion won. Operating profit and loss, along with dividends and distributions, grew by 90% to 140.2 billion won, and IB commission revenue increased by 62.4% to 96.8 billion won.
In the IB division, commission revenue from structuring and Project Finance (PF) increased from 65.8 billion won in the second quarter to 73.8 billion won in the third quarter.
Interest profit and loss was 221.7 billion won, a slight decrease from the previous quarter (228.1 billion won). The outstanding balance of credit extensions decreased from 5.2 trillion won to 5.1 trillion won, but the market share in the margin trading sector rose slightly from 12.6% to 13%. The number of customer active accounts increased from the previous quarter to 44 million.
Sales and Trading (S&T) operating profit and loss plummeted from 204.4 billion won in the second quarter to 105.1 billion won in the third quarter.
Amid this, rising personnel costs and IT costs caused the Cost-to-Income Ratio (CIR) to surge, leading to a decline in net profit. Third-quarter personnel costs were 76.1 billion won and IT costs were 52.5 billion won, both increasing compared to the previous quarter and the same period last year. Taxes and miscellaneous expenses, including education tax, surged to 52.9 billion won from 9.6 billion won in the same period last year. The third-quarter CIR was 36.4%, higher than the previous quarter (29.7%) and the same period last year (30.6%).
The cumulative net profit for the current period through the third quarter reached 1.396537 trillion won, an increase of approximately 61% from the same period last year.
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